The Love of Money Research around the World: Implications

for HRD

Thomas Li-Ping TangMiddle Tennessee State University, the USA

AAhad M. Osman-Gani, Presenting AuthorNanyang Technological University, Singapore

4th Asian Conference of the AHRD, Taipei, Taiwan,December 4-6, 2005

TOTO SUTARSO, Middle Tennessee State University, USA,

ADEBOWALE AKANDE, International Institute of Research, South Africa,

MICHAEL W. ALLEN, Griffith University, Australia,

ABDULGAWI SALIM ALZUBAIDI, Sultan Qaboos University, Oman,

MAHFOOZ A. ANSARI, University Science Malaysia, Malaysia,

FERNANDO ARIAS-GALICIA, National University of Mexico, Mexico,

MARK G. BORG, University of Malta, Malta,

LUIGINA CANOVA, University of Padua,, Italy,

BRIGITTE CHARLES-PAUVERS, University of Nantes, France,

BOR-SHIUAN CHENG, National Taiwan University, Taiwan,

RANDY K. CHIU, Hong Kong Baptist University, Hong Kong,

IOANA CODOBAN, Babes-Bolyai University, Romania,

LINZHI DU, Nanjing University, China,

ILIA GARBER, Saratov State Social-Economic University, Russia,

CONSUELO GARCIA DE LA TORRE, Technological Institute of Monterrey, Mexico,

ROSARIO CORREIA HIGGS, Polytechnic Institute of Lisbon – Portugal, Portugal,

CHIN-KANG JEN, National Sun-Yat-Sen University, Taiwan,

ALI MAHDI KAZEM, Sultan Qaboos University, Oman,

KILSUN KIM, Sogang University, South Korea,

VIVIEN KIM GEOK LIM, National University of Singapore, Singapore,ROBERTO LUNA-AROCAS, University of Valencia, Spain,EVA MALOVICS, University of Szeged, Hungary, ANNA MARIA MANGANELLI, University of Padua, Italy,ALICE S. MOREIRA, Federal University of Pará, Brazil, ANTHONY UGOCHUKWU O. NNEDUM, Nnamdi Azikiwe University, Nigeria, JOHNSTO E. OSAGIE, Florida A & M University, USA,FRANCISCO COSTA PEREIRA, Polytechnic Institute of Lisbon – Portugal, Portugal,RUJA PHOLSWARD, University of the Thai Chamber of Commerce, Thailand, HORIA D. PITARIU, Babes-Bolyai University, Romania, MARKO POLIC, University of Ljubljana, Slovenia,ELISAVETA SARDZOSKA, University St. Cyril and Methodius, Macedonia, ALLEN F. STEMBRIDGE, Southwestern Adventist University, USA,THERESA LI-NA TANG, Cendant Marketing Group, Brentwood, TN, USA, THOMPSON SIAN HIN TEO, National University of Singapore, Singapore,MARCO TOMBOLANI, University of Padua, Italy,MARTINA TRONTELJ, University of Ljubljana, Slovenia, CAROLINE URBAIN, University of Nantes, France,PETER VLERICK, Ghent University, Belgium

Outline

• The Meaning of Money• The Love of Money• The Love of Money Scale • Method• Results • Discussion, Implications, Limitations

Money

• Money is the instrument of commerce and the measure of value (Smith, 1776/1937).

• Money has been used to attract, retain, and motivate their employees and achieve organizational goals around the world (Milkovich & Newman, 2005).

• Money represents culture, history, values, location, political systems, and people.

The Meaning of Money

The meaning of money is in the eye of the beholder (McClelland, 1967, p. 10).

The meaning of money can be used as the “frame of reference” (Tang, 1992) in which people examine their everyday lives, such as pay satisfaction (Tang & Chiu, 2003; Tang, Luna-Arocas, & Sutarso, 2005).

The Meaning of Money

In the compensation literature, “one construct that should not be overlooked is the meaning of money” (Barber & Bretz, 2000: 45)

The Importance of Money

Research shows that 49.9 % of freshman in 1971 said that the important reason in deciding to go on to college is “to make more money”.

That number increased to 75.1 % in 1993

(The American Freshman, 1994).

The Importance of Money

*Among 10 Job Preferences (Jurgensen, 1978).

Men ranked Pay the 5th

Women ranked Pay the 7th

*Among 11 work goals, Pay was ranked

The 1st in Germany

The 2nd in Belgium, the UK, and the US and

(Harpaz, 1990).

The Importance of Money

In Hong Kong and China, most Chinese prefer cash among 35 components of compensation,

The cash mentality (Chiu, Luk, & Tang, 2001).

The Importance of Money

The lack of money has become the number one cause of dissatisfaction among university students on campus for the past seven years (1997-2003), up from the third and the second place of two earlier periods (1990-1996, 1981-1987, respectively) (Bryan, 2004).

The Importance of Money

Pay Dissatisfaction has “numerous undesirable consequences” (Heneman & Judge, 2000: 77):

Turnover (Hom & Griffeth, 1995; Tang, Kim, & Tang, 2000),

Low Commitment,

Counterproductive Behavior (Cohen-Charash, & Spector,

2001; Luna-Arocas & Tang, 2004), and Unethical Behavior (e.g., Chen & Tang, 2006; Tang & Chen, 2005;

Tang & Chiu, 2003).

The Love of Money

• The Love of Money has been used in everyday expression and popular literature.

• There is very little empirical research on this construct.

The Love of Money

Many scholars consider the love of money

as a taboo,

a religious or controversial issue,

not a scientific/academic issue, and

to be excessively value-laden.

Thereby, they may have great reluctance to study these issues.

The Oldest Reference

• “People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction. For the love of money is a root of all kinds of evil” (Bible: 1 Timothy, 6: 9-10; Tang & Chiu, 2003).

The ABCs of Money Attitudes

Affective: Do you “love or hate” money?

Behavioral: What do you “do” with your money?

Cognitive: What does money “mean” to you?

The Love of Money Construct

1. Factor Rich (Affective)

2. Factor Motivator (Behavioral)

3. Factor Important (Cognitive)

I Want to be Rich

The affective components of an attitude examine one’s love and/or hate orientations, feelings, or emotions.

I want to be Rich.

Being rich is good. Rich is better than poor. Very few want to be poor.

Money Is a Motivator

• 4 Methods: Improvement in Productivity• Participation: 0%• Job design: 9%• Goal setting: 16%• Contingent Pay: 30%• “No other incentive or motivational technique comes even

close to money” (Locke, Feren, McCaleb, Shaw, & Denny, 1980: 381)

• Money is a motivator (Stajkovic & Luthans, 2001). • Money is NOT a motivator (Herzberg, 1987).

Money Is Important

Lucrative rewards of Wall Street and the high compensation attract the most talented people to the business field. Bok (1993), formal president of Harvard University

Management professors (Gomez-Mejia & Balkin, 1992) Mental health workers change jobs (Tang, Kim, & Tang, 2000).

Money literature: “emphasis on its importance” (Mitchell & Mickel, 1999: 569).

The Love of Money ScaleFactor 1: Rich (Affective)

1. I want to be rich.2. It would be nice to be rich.3. Having a lot of money (being rich) is good.

Factor 2: Motivator (Behavior)4. I am motivated to work hard for money.5. Money reinforces me to work harder.6. I am highly motivated by money.

Factor 2: Importance (Cognitive)7. Money is good.8. Money is important.9. Money is valuable.

The Love of Money Is (1) one’s wants, desires, and values of money,

(2) one’s attitudes toward money,

(3) one’s meaning of money, (4) not one’s needs, greed, nor materialism (Belk, 1985),

(5) a multi-dimensional individual difference variable, and

(6) the combined notion of several constructs or factors (Du & Tang, 2005; Luna-Arocas & Tang, 2004; Tang & Chiu, 2003;

Tang, Luna-Arocas, & Sutarso, 2005)

Operational definition of the Love of Money

• This study does adopt a 9-item-3-factor Love of Money Scale, based on previous research (e.g., Tang & Chiu, 2003).

• The love of money is a higher-order (latent) construct with three sub-constructs (latent factors): Factors Rich, Motivator, and Important.

Measurement Invariance

It does little good to test a theoretical and conceptual relationship across cultures “unless there is confidence that the measures operationalizing the constructs of that relationship exhibit both conceptual and measurement equivalence across the comparison groups” (Riordan & Vandenberg, 1994, p. 645).

Measurement Invariance: 9 Steps

(1) an omnibus test of equality of covariance matrices across groups, (2) a test of “configural invariance”, (3) a test of “metric invariance”, (4) a test of “scalar invariance”, (5) a test of the null hypothesis that like items unique variances are

invariant across groups, (6) a test of the null hypothesis that factor variances were invariant

across groups, (7) a test of the null hypothesis that factor covariances were invariant

across groups, (8) a test of the null hypothesis of invariant factor means across groups,

and (9) other more specific test.

Measurement Invariance

Vandenberg and Lance (2000) concluded that “tests for configural and metric invariance were most often reported” (p. 35).

Configural invariance—factor structures Metric invariance—factor loadings

MethodThe senior author recruited researchers in

approximately 50 geopolitical entities through personal friends, contacts, or networking at professional conferences

Collaborators were asked to collect data from 200 full-time white-collar employees and managers in large organizations.

31 Samples, N = 6,498(1) Australia (n = 262), (2) Belgium (201), (3) Brazil

(201), (4) Bulgaria (162), (5) China-1 (319 university students), (6) China-2 (204 employees), (7) Egypt (200), (8) France (135), (9) Hong Kong (211), (10) Hungary (100), (11) Italy (204), (12) Macedonia (204), (13) Malaysia (200), (14) Malta (200), (15) Mexico (295), (16) Nigeria (200), (17) Oman (204), (18) Peru (192), (19) Philippines (200), (20) Portugal (200), (21) Romania (200), (22) Russia (200), (23) Singapore-1 (203), (24) Singapore-2 (336), (25) Slovenia (200), (26) South Africa (211), (27) South Korea (203), (28) Spain (183), (29) Taiwan (200), (30) Thailand (202), and (31) the USA (274).

Measure

58-item Money Ethic Scale (cf. Tang & Tang, 2003) 5-point Likert-type Scale:

strongly disagree (1),

neutral (3) and

strongly agree (5) as anchors.

Participants completed the survey voluntarily and anonymously.

Evaluation criteria

Cronbach’s alpha: alpha > .70

Measurement Invariance (1) configural invariance: χ2/df < 3.0, TLI > .90,

CFI > .90, RMSEA < .08 and (2) metric invariance: (a) chi-square change

(Δχ2/Δdf) and (b) practical fit index change

Chi-Square = 152.81 df = 24 p = .00

TLI = 1.00 CFI = 1.00

RMSEA = .03

The Love of Money

.69

M4e4

.71

M5e5

.50

M6e6

.36

M7e7

.46

M8e8

.61

M9e9

.62

M1e1

.52

M2e2

.39

Motivator

.83

.46

Important

.81

Rich.72

.84

.70

.60

.61

M3e3

.78

.68

.78

.79

The Loveof Money

e22

e23

e21

.68

.90

.63

Results of a 31-Sample Study

Note. First, we eliminated 14 samples (printed in bold) based on our rigorous criteria (χ2/df < 3.0, TLI > .90, CFI > .90, RMSEA < .08) and dropped 2 samples (bold and underlined) based on low Cronbach’s alpha (.70). Second, we eliminated only 5 samples (bold*) out of 31: Bulgaria, Hungary, Malaysia, Malta, and Nigeria based on less rigorous but acceptable criteria (χ2/df < 5, TLI > .90, CFI > .90, RMSEA < .10).

Configural Invariance

• First, we eliminated 14 samples (printed in bold) based on our rigorous criteria (χ2/df < 3.0, TLI > .90, CFI > .90, RMSEA < .08) and dropped 2 samples (bold and underlined) based on low Cronbach’s alpha (.70). Second, we retained a sample if it satisfied ¾ of the following four reasonably rigorous and acceptable criteria for evaluating configural invariance (χ2/df < 5, TLI > .90, CFI > .90, RMSEA < .10). We eliminated only 2 samples (bold*) out of 31: Malta and Nigeria.

Metric Invariance

The differences between unconstrained MGCFA (χ2 = 529.23, df = 360, p = .00, TLI = 1.00, CFI = 1.00, RMSEA = .01) and constrained MGCFA (χ2 = 867.43, df = 444, p = .00, TLI = .99, CFI = 1.00, RMSEA = .02) was significant based on chi-square change (Δχ2 = 338.20, Δdf = 84, p < .05), but not significant based on fit index change (ΔCFI = .00, n.s.).

We have achieved metric (factor loadings) invariance.

Discussion, Implications, Limitations

There was a good fit between our 9-item-3-factor Love of Money Scale (LOMS) and our whole sample involving 31 geopolitical entities.

We achieved configural invariance in 15 samples using the most rigorous criteria

We achieved configural invariance in 29 samples (our of 31) using less rigorous but acceptable criteria

We achieved metric invariance in 15 samples using 15 samples.

Implications--1Researchers should not take the measurement invariance

for granted.

Researchers need “to systematically examine the assumption of stable and transferable measurement continua” (Riordan & Vandenberg, 1994: 666).

This study is an initial step in the cross-cultural validation of the Love of Money Scale.

Implications--2

This study examines the love of money across samples and “money” is the focus of our attention.

Researchers have to examine the wording or phrasing of items carefully when they design future measurement instruments (Riordan & Vandenberg, 1994: 667).

Implications--3Cronbach’s alpha examines inter-item

reliabilityMeasurement invariance identifies equivalence

across populations: factor structure and factor loading.

Both contribute to our understanding of the measurement instrument.

Implications--4 One of the possible reasons of non-invariance is the

composition of the samples. Malaysia and Singapore-2 samples have Chinese,

Malay, Indian, and Caucasian. Singapore-1 sample has Chinese. The Nigeria sample has Igbo, Yoruba, Housa, and

other ethnic groups.

Other Research The love of money is indirectly related to

unethical behavior through Machiavellianism for Business students, male students, and male Business students, but not for Psychology students, female students, and female Psychology student.

Tang and Chen’s results offer some hope regarding the efficacy of teaching business ethics in business school because Business students reduce significantly the propensity to engage in Theft from Time 1 to Time 2.

Implications

Researchers and managers may have the potential to use the Love of Money Scale and the Propensity to Engage in Unethical Behavior Scale (Evil) as a personnel selection or an “at-hire” tool for “money sensitive” positions in organizations.

Future research may also examine the impact of possible training (HRD) on the love of money and other constructs that, in turn, may enhance employees’ ethical behaviors in organizations. More research is needed in this direction.

Limitations

First, there is no guarantee that the original meaning of these items is perfectly translated to the other languages.

Second, we have collected data from full-time employees in these geopolitical entities. However, we do not have perfect control of many nuisance variables

Third, our whole sample is reasonably large, but the sample from each geopolitical entity is quite small and does not represent a random sample or the average citizen of the geopolitical entity. We cannot generalize the findings to the whole population with full confidence.

Final Thoughts and Conclusions

This study offers researchers some confidence and insights in using the Love of Money Scale.

When researchers and practitioners apply the same tools consistently across organizations and geopolitical entities overtime, the cumulative results will enhance our abilities to understand, predict, and control the role of the love of money in organizations.

Thank YouDanke

Dankeshen

Grazie

Merci

Muchas Gracias

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